April 2026 dairy market review

Milk production

Domestic

GB milk deliveries in April reduced by a marginal 0.1% year-on-year with milk supplies now showing signs of stabilisation. The latest week of data available (week ending the 2nd May) saw a 0.6% decline. However, April still sat well-ahead (+3.2%) of the 5-year average. Dairy economics, including the Milk to Feed Price Ratio (MFPR) have generally been pointing towards expansion until a turn in the Autumn, with significant pressures building since.

The milk to feed price ratio (MFPR) has now come down into the ‘stabilisation’ zone due to falling milk prices. Milk price announcements have been falling since November and have meant as much as 15ppl decline for some. The latest Defra farmgate milk price is now around 35ppl on average with feed prices relatively steady.

Dairy cow kill is up by 4% when comparing the latest 6-month period (Sep-Feb) to the same period of the year prior. This equates to a further 8,000 head of dairy cattle culled. We have seen an acceleration in March with 16% more dairy cows being slaughtered than the previous year. Falling milk prices, high beef prices and volume management strategies are driving this trend.

AHDB’s latest forecast predicted stabilisation in milk supplies for this milk year with growth slowing through the flush and going into decline in the Autumn. However, as a result of some of the milk volume management tools and A/B pricing clauses in contracts as well as sharp growth in input costs, the decline has begun more quickly than expected. The forecast will be revised again in June.

Organic milk supplies

GB Organic milk deliveries saw a small decline in April possibly due to the dry weather. Volumes have been showing year-on-year growth since March 2025, but the latest GB organic delivery estimates (April) showed a 0.8% decline year-on-year for the month although we are annualising against a strong month last year.

However, in comparison to the 2021/22 year supplies are still behind by 19%.

The widening gap between conventional and organic milk prices suggests stronger demand for organic milk and need to maintain organic milk supplies which makes it important for production growth to be maintained.

Global

The latest global production data estimate shows growth in global milk flows continuing across milk-producing regions. Global milk deliveries averaged 849 million litres per day in February, an increase of 35.2 million litres per day (+4.3%) across the selected regions, compared to the same period in the previous year.

• Milk deliveries in the EU averaged 399.7 million litres per day in February, a remarkable increase of 20.6 million litres per day (+5.4%) compared to the same month of the previous year, and the strongest February on record. Increased production was driven by previously high margins, lower feed costs and improved productivity, though farmgate prices have now dropped. This was mainly driven by Germany, up 164 million litres (+7%), France, up 141 million litres (+8%), and Italy, up 89 million litres (+9%)

• US production was up 8.4 million litres per day (+3%) year-on-year, with production averaging 287.3 million litres per day in February. Dairy farm margins have lowered from strong levels but remain positive, supported by dairy-beef revenue streams

• Australia recorded a year-on-year increase of 0.1 million litres per day (0.6%) compared to last year, to sit at an average of 20.6 million litres per day. Despite rising input costs and increasing drought risk, milk prices have remained supported

• New Zealand deliveries were up by 3.9 million litres per day (+6%) year-on-year with February average daily deliveries at 68.6 million litres per day. Farmer confidence was supported by firm milk prices and favourable weather conditions which increased milk flows

• Argentina’s deliveries continued to grow, up by 2.8 million litres per day (+10.6%) in February, year-on-year. Dairy industry investment, favourable weather conditions and good dairy producer economics drove higher productivity. However, falling milk prices have reduced profitability, leading to slower growth in forecasted for 2026

Rabobank expect that milk production growth among the 'Big 7' exporters is forecast to slow to 0.2% in 2026, down from 2.6% in 2025, with a slight contraction expected in early 2027. Most regions will slow, with the exception of the US that should continue to grow by 2% given the increase in investment and cow numbers.

Dairy trade and war in the Middle East

The war in the Middle East has sparked volatility in the entire agricultural sector including dairy. This has resulted in supply disruptions and trade flows through the Strait of Hormuz and slowdowns via other routes.

Due to this there has been an increase in fuel prices and fertiliser prices, thereby increasing input costs and pressurising farm margins.

This will have ripple effects across the dairy sector with long-lasting impacts. The situation differs from the outbreak of war in Ukraine when production was already tight and there was a direct shortage of feed resulting. Globally, there has been excess production of dairy products following spectacular growth in milk production in 2025 which continued into 2026.

Markets could be under further pressure with softening demand being unable to absorb the excess stocks. Demand pressure, both in the Middle East and further afield is likely to be a key risk.

The GCC remains a high potential market for UK dairy products worth £99 million in 2025. The GCC (a trading bloc made up of UAE, Saudi Arabia, Bahrain, Oman, Qatar and Kuwait) is the second-largest export market outside Europe for dairy products from the UK and any disruption could put this revenue at risk.

In addition, due to the conflict, displaced products from major exporters would pressurize markets elsewhere.

Wholesale markets: April

• Fats markets have been weak in April with steep declines in cream and butter, losing much of the value gained last month
• Butter is at the lowest price seen since September 2021
• Mild cheddar prices softened with demand sluggish
• SMP remained in demand, following the wider demand for protein and shortage in the market

Volatility has continued. The budding recovery seen in dairy markets last month has stopped in its tracks in the face of continuing large milk volumes.
The conflict in Iran has also damaged confidence and some export opportunities which has stripped some of the value out of the fats markets.

Skimmed milk powder (SMP)

Skimmed milk powder is the only commodity to buck the trend. SMP is the strongest-performing product relative to fats and prices rose by £20/t to £2,360.

Prices eased slightly recently but were re-supported by a strong GDT auction, which rose again.

Demand for protein remains present with a lot of interest supported by a globally competitive position.

Middle East/Southeast Asia demand suppressed by logistically challenges and freight costs posed by the global conflict.

Mild Cheddar

Cheddar prices have now eased back after the strengthening seen at the end of March and the anticipated ramp-up in prices has not materialised.

Demand is reported to be weak as buyers have already covered positions, and sellers are unwilling to sell much below the £3,000/t mark.

Plenty of cheese is available due to the high milk volumes so there is little urgency to buy.

The average price for mild cheddar was £2,980, 3% lower than the last period.

Bulk cream

Prices have lost much of the value gained in the surprise uplift in March with markets said to be incredibly volatile.

The ongoing conflict situation drove buyer uncertainty and weakened demand.

The market has returned to fundamentals with the amount of milk and cream available remaining at record highs.

Prices fell over the period from as high as £1.75/kg to as low as £1.05/kg with the average for the month coming in at £1,238/tonne.

UK prices are reported to be stronger than those on the continent.

Butter

As with the cream situation, the butter market has been very volatile and has lost all of the value gained in the first quarter of the year.  It is now sitting at an average of £3,540/t which is the lowest price seen since September 2021.

Buyers are taking a much more cautious approach currently and stores throughout Europe are reportedly full. Plentiful (and cheap) cream means people are churning and selling butter very cheaply.
Prices are weakening as milk volumes increase on the run-up to the Spring flush.

The latest GDT (Global Dairy Trade) auction results saw some slight recovery in the latest period after a couple of falls, increasing by 1.5% since the previous event. The recovery was led by SMP, up by 3.0% whilst butter and cheddar fell.  AMF was a surpise gain of 1.1%. 

Farmgate milk prices

The latest published farmgate price was for March 2026 and was announced by Defra as being 35.05ppl, down 0.86 pence (2.4%) on the previous month.

Latest announced farmgate prices were mostly stable with a few increases for May.

Aligned liquid contracts saw stability Only one contributor has lowered its price in May. Sainsbury’s and Waitrose increased its price by 0.25ppl each whilst Tesco made a positive announcement of 0.12ppl. M&S held steady after making a positive announcement previous month.

Looking to non-aligned liquid contracts, most buyers held for another consecutive month. Crediton Dairy, Muller Direct and Payne’s Dairies held steady for the second consecutive month. Freshways held on to their price for the third consecutive month. Pembrokeshire Creamery was the only one in the category to make a positive announcement of 0.04ppl.

Cheese contracts were largely consistent except for two buyers on the AHDB League table. Leprino and Parkham Farms increased their price by 1.60ppl and 2.00ppl respectively after having held steady last month. Apart from those, Barbers and Belton Cheese have been stable since April. Saputo held their price after a period of five consecutive months of decline. First Milk held after a marginal increase last month. South Caernarfon Creameries and Wensleydale Creamery also made no changes to their price.

Manufacturing contracts were steady to firm during the month. Meadow held for the third consecutive month whilst Pattemores Dairy held for the fourth consecutive month. UK Arla Farmers Manufacturing increased their price by 1.76ppl. This is the second consecutive month of increase in price for them.

Retail demand

During the 12 weeks ending 18 April 2026, volumes of cows’ dairy were in decline, down 0.2% year-on-year¹. Spend on cows’ dairy increased by 4.1% year-on-year, driven by a 4.4% increase in average retail prices despite farmgate and the majority of wholesale prices decreasing.

Cows’ milk

Cows’ milk saw a 1.4% decline in litres purchased year-on-year¹, while increasing average prices rose by 7.5%.
Declines were seen for semi-skimmed, skimmed and other cows’ milk. Whole milk continued to see volume growth, with a 2.7% increase year-on-year, due to more buyers and an increase in volumes purchased per buyer. Plant-based milk also saw volume growth.

Cows’ cheese

Cows’ cheese remained in volume growth, seeing a 1.4% increase year-on-year¹. Spend grew by 1.9% during this period, primarily due to volume increases but also due to a 0.5% increase in average prices.
Growth in cheese was driven by other cow cheese, snacking, and specialty and continental varieties. The top three growing subcategories within cows' cheese were cottage cheese (+1,335K kg), soft white cheese (+587K kg) and kids snacking (+531K kg).
While Cheddar is the most popular cheese purchased in Britain, it saw a 0.6% volume decline this period due to a reduction in buyers. Processed saw the greatest actual decline in volumes (-319K kg), and British regionals (-218K kg) and Stilton and British blue (-103K kg) also saw reduced demand.

Cows’ butter

Cows’ butter saw a 0.6% decrease in volumes purchased year-on-year¹. Spend on butter continued to decline this period, down 0.8%, as average prices paid began to decline (-0.2%).
There is a significant correlation between movements in wholesale price and the retail price, although transmission is very low, and it appears that recent decreases in wholesale price is now marginally feeding through to shoppers as we predicted back in December, although as yet utterly dwarfed by the decline in wholesale prices.

Block butter continues to see volume growth (+7.4%). While consumer trends for wanting less ultra-processed foods and more natural foods will have played a part in this increased demand, average prices for block butter also fell into decline this period, down 2.2%. However, increased demand for block butter was not enough to offset the decline in cow butter spread volumes (-4.2%).

Cows’ yogurt, yogurt drinks and fromage frais

Volumes continue to see growth (+5.5%), with spend increasing 7.6% year-on-year¹. Average prices also increased by 1.9%.

Cows’ standard plain yogurt saw the fastest growth, up 25.2% year-on-year, while cows’ fat-free yogurt saw the greatest actual growth, with an additional 3,935K kg purchased year-on-year (+9.4%).

Cows’ cream

Cows’ cream volumes remained in slight growth, up 0.1% year-on-year, with an 6.0% increase in spend primarily driven by a 5.9% increase in average prices paid¹.
The majority of growth is through clotted cream (+18.8%) with an additional 103K litres due to increased volumes purchased per shopping trip. Single, double and other cow cream also saw gains, possibly due to Easter demand.
¹ NIQ Homescan POD, Total GB, 18 April 2026

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